BEIJING: Beijing on Saturday proposed scrapping a rule that prevents US authorities from inspecting the audits of Chinese companies listed in the United States, in a longstanding dispute between the countries.
The announcement by the securities watchdog comes after Washington said Chinese firms could be delisted in the United States by 2024 if they do not comply with audit requirements.
The demand puts more than 200 US-listed Chinese companies at risk.
Congress in 2020 passed a law targeting Chinese companies under which the US Public Company Accounting Oversight Board must be able to inspect the audits of foreign firms listed on US markets.
Mainland Chinese and Hong Kong companies are notorious for not submitting their financial statements to US-approved auditors.
On Saturday, new draft rules proposed removing a requirement that on-site inspections should mainly be carried out by Chinese regulatory agencies and that foreign authorities should rely on their results.
The China Securities Regulatory Commission (CSRC) will instead provide assistance on cross-border inspections in line with a “cooperation mechanism”, Beijing said.
The CSRC said Thursday that Chinese and US regulators had engaged in several rounds of talks on auditing supervision and that “both sides are willing to resolve differences and problems”.
Several Chinese companies have already been ordered to comply by the US Securities and Exchange Commission or face delisting.
More than 200 companies with a total market capitalisation of about $2.1 trillion could be affected.
Comments
Comments are closed.